A pair of Virden-based oil companies that specialize in equipment rentals have been taken to court over a $2.3-million debt to Royal Bank of Canada, according to court documents detailing the ongoing legal action.
A judge from the Manitoba Court of Queen’s Bench granted a receivership order on Dec. 21 to RBC, the principal lender to Force Rentals Ltd. and a numbered Manitoba company known as Titan Production Testing.
Both are described as providing oil field services and equipment rentals, primarily in and around southwestern Manitoba.
A report from Deloitte, the receiver of all of the companies’ assets, filed on Jan. 7 and posted to the firm’s website, says that on top of the $2.3 million that was owed to RBC on the date of receivership — of which $1.7 million is from Force and $600,000 is tied to Titan — the companies may also owe more than $300,000 in unremitted payroll source deductions and GST, as well as unpaid wages and vacation.
The Sun made attempts to speak to the presidents of both companies, including Derek Coulter from Force and Aaron Rookes from Titan, but did not receive a formal response.
Coulter, who is also the secretary and treasurer of Titan, told The Sun in a brief phone call that he would need to speak to his partner first before commenting. The Sun did not hear back from Coulter and has not spoken to Rookes.
In an email, Richard Schwartz, a partner at the Winnipeg law firm Tapper Cuddy who is listed by Deloitte as the counsel for Force and Titan, wrote to The Sun: "It’s not my place (or practice, for that matter) to speak to the media."
The Jan. 7 report from Deloitte says Force and Titan were both incorporated in 2007 — in October and December, respectively.
The companies’ head offices are located at 165 Queens St. West in Virden and their primary assets include pressure tanks, flare stacks, barrel test tanks, flow back tanks, pipe and light towers.
When the receivership order was granted, the companies were winding down their operations for the holidays, with their only active job being a 24-hour project for Corex Resources Ltd.
In discussions with management and a review of the companies’ internal financial statements from Oct. 31, 2018, Deloitte reported that the net book value of the land, buildings and equipment was approximately $2.9 million, or $2.1 million for Force and $800,000 for Titan.
However, due to the absence of accurate and up-to-date equipment lists, Deloitte said it has had to compile the companies’ capital assets through physical site inspections and contacts with third parties believed to be in possession of their equipment.
The Canada Revenue Agency has also advised Deloitte that Force may owe approximately $130,000 for unremitted payroll source deductions and $60,000 for unremitted GST.
Titan, meanwhile, may owe approximately $110,000 for unremitted payroll source deductions. However, the CRA noted that as of the report’s date, it had not done any audits to confirm how much was actually owed.
As of the date of receivership, the companies also owed 11 individuals $38,000 in unpaid wages and vacation.
The companies also had $580,000 in claims with unsecured creditors, including $354,000 with Force and $226,000 for Titan.
Deloitte said it was unable to obtain an updated accounts receivable sub-ledger due to "limited co-operation from Force’s directors."
But the most recent information available from RBC as of Oct. 31 showed Force was owed approximately $71,000 from 10 customers.
Titan was also owed approximately $253,000 from seven customers and had not been paid by the time the report was released.
